Bank Loan Alert: Whenever you apply for a loan, the first thing that is checked is your CIBIL score. This makes it easier for banks to understand whether you will be able to repay the loan on time or not. If your score is good, you can get a loan easily and with a better interest rate. But if the CIBIL score itself is bad, then there may be difficulty in getting a loan.
First know how much CIBIL score is good?
The CIBIL score ranges from 300 to 900. If your CIBIL is 750 or more, it is considered good. The closer it is to 900, the easier it will be for you to get a loan and you can also negotiate a lot on the interest charged on it. If your CIBIL score is between 550 and 750, it is considered fine. In such a situation, banks may refuse to give you a loan and may ask for some collateral. If your score is less than 550, then forget about the loan, because it is considered bad and no bank will be ready to give a loan on it. Let us know 5 ways by which you can improve your CIBIL score.
Keep paying the EMI of every loan on time
The biggest impact on CIBIL is loan default. Even if you miss one or two EMIs of your loan, your CIBIL can be affected. This can cause you problems in getting a loan. But if you pay all the EMIs on time, your CIBIL will remain good and every bank will have full confidence in you to give you a loan.
Avoid repeated hard inquiries from CIBIL
Many times people apply to different banks to get a loan and take the loan from the bank from which they get a loan at a lower interest rate. Let us tell you that if you have applied for a loan in many banks, then your CIBIL score will be checked by each bank. When a bank or NBFCs checks your credit score, it is called a hard inquiry and this affects your CIBIL.
Do not increase your credit card limit again and again
When someone gets an offer from the bank to increase the credit card limit, he is very happy and immediately accepts the offer. Remember, credit card is a kind of loan, so do not increase your loan limit without any reason. Many times people themselves request to increase the limit. If your limit is high, it is possible that you will make a lot of purchases from it or maybe you will buy many products and make EMIs. This will affect the CIBIL and the bank will feel that you do not have enough money, that is why you are taking all the things on EMI.
Use only up to 30% of your credit limit
Suppose your credit card has a limit of Rs 1 lakh, but this does not mean that you keep shopping for Rs 1 lakh every month. Doing this can affect your CIBIL. You should not use more than 30 percent of the credit card limit. Thus, if your card limit is Rs 1 lakh, then try to shop only up to Rs 30,000 from it.
Do not take loan after loan
To get a loan easily, the first thing you have to do is to avoid meaningless loan offers. Seeing your good CIBIL score, everyone will be eager to give you a loan because it is expected that you will repay the loan easily. However, if you take too much loan then it also shows your poor financial condition, which can spoil your CIBIL score. So you should avoid taking too much loan.
